China’s credit growth was weaker than expected in February, as new bank loans more than halved from the previous month and lending in the riskier trust sector slowed down.

New bank lending fell to 644.5 billion yuan ($116 billion) from a remarkably strong 1.32 trillion yuan in January, figures released late on Monday showed. Economists had been expecting a result of around 730 billion yuan, according to a Bloomberg survey.

The weak credit data follows a slump in exports in February and slower-than-expected inflation data. While economists said the trade data was affected by China’s New year holiday period and rampant overinvoicing, which took place this time last year, the data adds to concerns about whether China will be able to meet its 7.5 per cent economic growth target this year.

Growth in the value of outstanding bank loans slowed to 13.7 per cent from a year ago, compared with 13.8 per cent in January, according to the figures released on Monday. A broader measure of credit growth also slowed, with total social financing up by 17.1 per cent in February from a year ago, compared with a 17.4 per cent increase in January.

“Our expectation remains that credit will continue to slow over the coming months and so too will the wider economy," Capital Economics analysts said in a research note.

Capital said that much of the slowdown in broad credit was in trust loans, “perhaps signalling that investors are becoming more wary following the highly publicised near default in the sector at the end of January."

The Credit Equals Gold trust product, which was distributed to wealthy clients of state-owned giant, the Industrial and Commercial Bank of China, and backed by a loan to troubled Shanxi coal miner Zhengfu Energy, was bailed out at the end of January.

The state-owned China Credit Trust reached an agreement with investors to restructure the high-yield product. But not before the near-default threw the spotlight on potential financial stresses in China’s rapidly growing shadow banking sector.

Troubled solar-equipment maker Chaori defaulted on an interest payment, which while small was a symbolic event, signalling the government would not come to the rescue for all highly leveraged, troubled companies.

There is concern that if defaults pile up, it could lead to a crisis of confidence in what has become an important source of credit for China’s smaller and privately owned companies.